UNIT- II CPM and PERT: Introduction of PERT and CPM, Planning scheduling and controlling, bar charts, PERT

and CPM networks. Management is continually seeking new and better control techniques to cope with the complexities, masses of data, and tight deadlines that are characteristic of highly competitive industries. Managers also want better methods for presenting technical and cost data to customers. Scheduling techniques help achieve these goals. The most common techniques are 1. 2. 3. 4. 5. 6. 7. 8. Gantt or bar charts Milestone charts Line of balance Networks Program Evaluation and Review Technique (PERT) Arrow Diagram Method (ADM) [Critical Path Method (CPM)] Precedence Diagram Method (PDM) Graphical Evaluation and Review Technique (GERT)

Advantages of network scheduling techniques include 1. They form the basis for all planning and predicting and help management decide how to use its resources to achieve time and cost goals. 2. They provide visibility and enable management to control “one-of-a-kind” programs. 3. They help management evaluate alternatives by answering such questions as how time delays will influence project completion, where slack exists between elements, and what elements are crucial to meet the completion date. 4. They provide a basis for obtaining facts for decision-making. 5. They utilize a so-called time network analysis as the basic method to determine manpower, material, and capital requirements, as well as to provide a means for checking progress. 6. They provide the basic structure for reporting information. 7. They reveal interdependencies of activities. 8. They facilitate “what if” exercises. 9. They identify the longest path or critical paths. 10. They aid in scheduling risk analysis. The three basic project planning techniques are Gantt chart, CPM and PERT. All monitor progress and costs against resource budgets. Gantt chart Gantt charts are also called Bar charts. The use of Gantt charts started during the industrial revolution of the late 1800's. An early industrial engineer named Henry Gantt developed these charts to improve factory efficiency.

Gantt chart is now commonly used for scheduling the tasks and tracking the progress of energy management projects. Gantt charts are developed using bars to represent each task. The length of the bar shows how long the task is expected to take to complete. Duration is easily shown on Gantt charts. Sequence is not well shown on Gantt Charts. Pictorial representation of projects in the form of bars is a Gantt chart This technique graphically represents the progress of a project versus the time frame within which it must be completed Gantt charts allow project managers to plan all activities, estimate the time necessary to complete each, estimate the time required to complete the overall project and monitor project progress

Figure: Example of Gantt chart Weaknesses in Gantt charts 1. Interdependencies of activities is not established 2. Project progress cannot be identified 3. Uncertainties are not shown

The major discrepancy with Gantt, milestone, or bubble charts is the inability to show the interdependencies between events and activities. Interdependencies are shown through the construction of networks. Network analysis can provide valuable information for planning, integration of plans, time studies, scheduling, and resource management. The primary purpose of network planning is to eliminate the need for crisis management by providing a pictorial representation of the total program. The following management information can be obtained from such a representation:          Interdependencies of activities Project completion time Impact of late starts Impact of early starts Trade-offs between resources and time “What if” exercises Cost of a crash program Slippages in planning/performance Evaluation of performance

Networks are composed of events and activities. The following terms are helpful in understanding networks: Event: Equivalent to a milestone indicating when an activity starts or finishes. Activity: The element of work that must be accomplished. Duration: The total time required to complete the activity. Effort: The amount of work that is actually performed within the duration. Critical Path: This is the longest path through the network and determines the duration of the project. It is also the shortest amount of time necessary to accomplish the project

CPM - Critical Path Method DuPont developed a Critical Path Method (CPM) designed to address the challenge of shutting down chemical plants for maintenance and then restarting the plants once the maintenance had been completed. Complex project, require a series of activities, some of which must be performed sequentially and others that can be performed in parallel with other activities. This collection of series and parallel tasks can be modelled as a network.

CPM models the activities and events of a project as a network. Activities are shown as nodes on the network and events that signify the beginning or ending of activities are shown as arcs or lines between the nodes. The Critical Path Method (CPM) is one of several related techniques for doing project planning. CPM is for projects that are made up of a number of individual "activities." If some of the activities require other activities to finish before they can start, then the project becomes a complex web of activities. CPM can help figure out: How long the complex project will take to complete which activities are "critical" meaning that they have to be done on t i me or el se the whole project will take longer If you put in information about the cost of each activity, and how much it costs to speed up each activity, CPM can help you figure out: Whether you should try to speed up the project, and, if so, what is the least costly way to speed up the project. Steps in CPM Project Planning 1. 2. 3. 4. 5. 6. Specify the individual activities. Determine the sequence of those activities. Draw a network diagram. Estimate the completion time for each activity. Identify the critical path (longest path through the network) Update the CPM diagram as the project progresses.

Identify the Critical Path The critical path is the longest-duration path through the network. The significance of the critical path is that the activities that lie on it cannot be delayed without delaying the project. Because of its impact on the entire project, critical path analysis is an important aspect of project planning. The critical path can be identified by determining the following four parameters for each activity: ES – Earliest start time: the earliest time at which the activity can start given that its precedent activities must be completed first. EF – Earliest finish time, equal to the earliest start time for the activity plus the time required completing the activity. LF – Latest finish time: the latest time at which the activity can be completed without delaying the project. LS – Latest start time, equal to the latest finish time minus the time required to complete the activity.

The slack time for an activity is the time between its earliest and latest start time, or between its earliest and latest finish time. Slack is the amount of time that an activity can be delayed past its earliest start or earliest finish without delaying the project. The critical path is the path through the project network in which none of the activities have slack, that is, the path for which ES=LS and EF=LF for all activities in the path. A delay in the critical path delays the project. Similarly, to accelerate the project it is necessary to reduce the total time required for the activities in the critical path. CPM Benefits    Provides a graphical view of the project. Predicts the time required to complete the project. Shows which activities are critical to maintaining the schedule and which are not.

CPM Limitations While CPM is easy to understand and use, it does not consider the time variations that can have a great impact on the completion time of a complex project. CPM was developed for complex but fairly routine projects with minimum uncertainty in the project completion times. For less routine projects there is more uncertainty in the completion times, and this uncertainty limits its usefulness.